Turkey's Recep Tayyip Erdogan emerged victorious from his biggest electoral challenge in a decade-and-a-half, giving him the sweeping, executive powers he has long sought and extending his grip on the nation of 81 million until at least 2023.

Turkey's Recep Tayyip Erdogan emerged victorious from his biggest electoral challenge in a decade-and-a-half, giving him the sweeping, executive powers he has long sought and extending his grip on the nation of 81 million until at least 2023.

The most popular - yet divisive - leader in modern Turkish history, Mr Erdogan pledged there would be no retreat from his drive to transform Turkey, a deeply polarised nation that is both a Nato member and, at least nominally, a candidate to join the European Union.

Mr Erdogan (64) is loved by millions of devoutly Muslim working-class Turks for delivering years of stellar economic growth and overseeing the construction of roads, bridges, hospitals and schools.

The president and his ruling Islamist-rooted AK Party claimed victory in Sunday's presidential and parliamentary polls after defeating a revitalised opposition that, in recent weeks, had gained considerable momentum and looked capable of staging an upset.

"It is out of the question for us to turn back from where we've brought our country in terms of democracy and the economy," Mr Erdogan told jubilant, flag-waving supporters.

Following the result, international observers said yesterday that Turkey's election was unfair, because the opposition had "no equal opportunities" to make their case against Mr Erdogan, but they did not find evidence of widespread vote rigging.

The observers' report was issued hours after Muharrem Ince, Mr Erdogan's main challenger, formally conceded defeat in the election and warned that Turkey was becoming "a one-man regime".

Observers from the Organisation for Security Cooperation in Europe (OSCE) said that voters had a "genuine choice" but that the opposition was not able "to compete on an equal basis".

The OSCE team said that Mr Erdogan had benefited from "excessive coverage" by state and private media. It also said that emergency laws Mr Erdogan imposed "limited fundamental freedoms of assembly and expression".

The report focused on the pro-Kurdish People's Democratic Party, which faced "a number of attacks and disruptions". Selahattin Demirtas, the party's presidential candidate, is in prison on terrorism charges he denies and "could not campaign freely".

"There is some work to be done by the authorities to ensure that future elections in Turkey are in line with democratic standards and commitments," said Audrey Glover, the head of the observer mission.

Mr Erdogan took 52.5pc of the vote in the presidential race, with more than 99pc of the votes counted. His AK Party took 42.5pc in the parliamentary polls, and was boosted by its nationalist allies, which outstripped expectations and took 11.1pc.

The vote ushers in the powerful executive presidency backed by a narrow majority in a 2017 referendum.

Critics, including civil rights groups, have said this will further erode democracy and entrench one-man rule. They point to a widening crackdown since a failed 2016 military coup that has seen some 160,000 people detained and media outlets shut down.

Under the new system, the office of prime minister will be abolished. The president will be able to issue decrees to form, regulate ministries and remove civil servants, all without parliamentary approval.

The lira currency, which has lost some 20pc of its value this year, rallied some 2pc in early trading yesterday, while stocks rose more than 1pc, after an early surge, as investors bet that the result would lead to political stability - a positive for financial markets.

Although investors have been nervous about Mr Erdogan's tightening grip on power, there had been concern that the outcome of the election could lead to policy uncertainty.

The state-run Anadolu news agency said that, based on unofficial results, the AK Party and its MHP alliance will hold 343 seats in Turkey's 600-seat parliament, with 293 of those for the AKP and 50 for the nationalists.

The main opposition Republican People's Party (CHP) will have 146 seats, the pro-Kurdish HDP 67 and the breakaway nationalist Iyi Party 44.

The main opposition's presidential candidate, former teacher and veteran CHP lawmaker Muharrem Ince, took 31pc.

Mr Ince's silence in the aftermath of the vote brought him widespread criticism from supporters on social media.

Mr Erdogan has repeatedly cast his opponents as enemies of democracy, tapping into the groundswell of nationalist feeling that followed the failed coup in 2016.

"There is no stopping for us until we bring Turkey, which we saved from plotters, coupists and political and economic hitmen, street gangs and terrorist organisations, to among the top 10 economies in the world," he said.